Listen up! The bond markets are talking
The recent rally in U.S. Treasurys is a sign that the decline in oil prices is probably for real. Unfortunately, it’s also an indication of more economic weakness ahead.
Bond prices have rallied lately. And that’s both a good thing and bad thing.
The encouraging news is that the recent bump in bond prices and resulting dip in yields is probably a sign that the worst of the oil-fueled (pun intended) inflation fears are over.
The yield on the benchmark U.S. 10-year Treasury is now hovering near 3.8% – down from about 4.15% just a month ago.
What’s the bigger economic concern right now: the credit crunch or inflation?
Higher bond prices and lower yields are usually a sign that pricing pressures are waning since inflation eats into the value of fixed-income investments. [Read more →]
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